Nike (NKE) has reported fiscal fourth-quarter financial results that beat Wall Street forecasts across the board.
The Oregon-based manufacturer of sneakers and athletic apparel announced earnings per share (EPS) of $0.14 U.S., which was slightly above the $0.13 U.S. consensus of analysts.
Revenue for the quarter totaled $11.10 billion U.S., which beat the $10.72 billion U.S. expected on Wall Street. However, sales were down 12% from a year earlier.
In its earnings release, Nike said that its fiscal fourth-quarter results represent the “largest financial impact” from its turnaround strategy and that the headwinds it faces are likely to moderate in coming quarters.
Nike is in the midst of a multi-year turnaround strategy prompted by declining sales in the key market of China and a lack of consumer enthusiasm for the company’s sneakers and brand.
During fiscal Q4, Nike’s profits fell 86% from a year earlier as it worked to unwind inventory, win back wholesale partners, and revamp its online business.
The company had previously warned that its fiscal fourth quarter would be the low point of its turnaround under CEO Elliott Hill, who took the helm of the company last October.
However, in recent months, Nike’s situation has worsened, particularly with U.S. President Donald Trump’s import tariffs on products made in Asian countries such as Vietnam and China, where the bulk of Nike’s manufacturing occurs.
Management said on their earnings call with analysts and media that tariffs will cost Nike $1 billion U.S. in the current fiscal year.
In recent months, Nike has focused on repairing relations with wholesale partners that were damaged under previous CEO John Donahoe and investing in sports-themed advertisements.
In terms of guidance, management said they now expect sales to decline by a mid-single-digit percentage during the current quarter, in line with expectations of down 7%.
Nike also expects its gross margin to be down between 3.5 and 4.25 percentage points, including one percentage point from current tariff rates.
NKE stock has declined 34% in the last 12 months, including a 15% decline this year, to trade at $62.54 U.S. per share.
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